C&B Notes

Investing is a discipline built on cumulative knowledge, and it requires a continuous evaluation and assessment of new information. The purpose of C&B Notes is to pass along the ideas, concepts, stories, and information that are informing, influencing, and updating our worldview. We use them to build on our “latticework of mental models” that help us make better decisions.

811 articles in list

The Dollar Saves Venezuela

Thankfully and mercifully, daily life in Venezuela is evolving.  We did not expect this level of relief without a leadership transition, but the Maduro administration has quietly allowed free market reforms to take shape.  The country is now essentially dollarized, at least where the economy is working.  And rum-maker Santa…

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Not Really a Weakness

We know of no company other than Daily Journal Corporation that could publish this statement of material weaknesses and not have shareholders worry about the veracity of the financials.  It is a testament to the reputation that Charlie Munger and Rick Guerin have earned over their lifetimes. From Daily Journal’s…

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Digitizing the Renminbi

Most of the discussion we have heard about digital currencies is around their use as a replacement or alternative to a sovereign fiat currency. …

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Euro Cash Piles

A very strange, unintended consequence of negative interest rate policies. German banks are stuffing vaults with money to help offset the mounting cost of negative interest rates, and some of them are running out of space. The physical cash holdings of German banks rose to a record 43.4 billion euros…

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EBITDA Definition Danger

EBITDA calculations vary widely across businesses and industries, and loosey-goosey “adjusted” EBITDA definitions exacerbate risk for lenders who are already offering covenant-lite terms.  As…

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Malone in Long Form

This interview with John Malone during Liberty’s Investor Day was fantastic, as he covered a lot of ground across media and telecom industries.  We particularly enjoyed his focus on competitive advantages and his assessments of how companies are (or are not) meeting their customers’ respective needs.

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Online Ad Effectiveness

Google is under antitrust heat for the dominance of its online advertising business.  The WSJ provides a cool visual summary of how the ad serving engine works in various scenarios.  Steve Tadelis has a contrary take, as he challenges the core underlying assumption about the effectiveness of online advertising.  His…

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Patience as a Precursor to Prosperity

In GMO’s most recent quarterly letter, Ben Inker revisited his and the firm’s experience leading up to and following the bursting of the internet bubble in the early 2000’s.  Inker notes that the current extremes are the greatest since the early 2000’s. The years leading up to the 2000 stock…

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Well, That Didn’t Work…

In April 2017, we ran a note about a strategic effort by Adidas to add “Speedfactories” to diversify its global supply chain.  It evidently didn’t work, which leads to some interesting questions about the inevitability of automation to kill lower-wage jobs.  [An Adidas video from the initial PR rollout, which…

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da Vinci’s Revolutionary Bridge

Leonardo da Vinci responded to a Middle Ages RFP (request for proposal) from the Ottoman Empire for a bridge design.  Alas, the Sultan turned him down.  However, a team of MIT researchers recently demonstrated that da Vinci’s radical design was not misguided but rather just ahead of its time. Da…

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If You Can’t Beat ‘Em

We have visited hundreds, if not thousands, of “mom and pop” stores throughout Latin America, as they account for a large portion of retail sales in the region.  Kiranas, which are akin to Latin American bodegas, are of similar — if not greater — importance to the informal retail landscape…

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Progress in Brazil

In our most recent partner letter, we identified the importance of pension and tax reforms to unlock economic growth in Brazil.  Lawmakers successfully passed some long-awaited long-term fixes to the country’s social security equivalent earlier this month.  Tax reform is next on the legislative docket. Brazilian senators overwhelmingly approved on…

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